From finishing line to bottom line

Grant Hackett is making a splash in the emerging field of sports and entertainment investment advice.
Photo: Louise Kennerley

Triple Olympian Grant Hackett was determined to dive into the competitive corporate world when he retired from swimming after the Beijing games in 2008.

Six weeks after going agonisingly close to claiming what would have been a historic third consecutive Olympic gold medal in the 1500-metre freestyle, Hackett swapped his Speedos and goggles for a suit and tie at Westpac.

About 2½ years later, the former Australian swimming captain has developed the bank’s sports and entertainment business, Alpha, which services 1000 clients and has a team of 35 specialist staff.

“Finance was always a field I wanted to go into and it was very important to me to retire to a career that I was passionate about,” Hackett tells The Australian Financial Review.

“I’ve been trading shares since I was 16 or 17 years of age and have always been very interested in finance,” he says.

“As a sports person you get pigeonholed and stereotyped to an extent, but for me swimming was always going to be only one component of my life.”

Hackett, 31, is fast earning a reputation as a serious player at Westpac. Some insiders suggest his ambition and drive could even lead him to be one of the bank’s senior leaders in years to come. For now, Hackett, who is also a director of hedge fund Regal Funds Management and works part-time as a television presenter, is committed to his role heading Alpha.

Alpha provides professional athletes and entertainers with a dedicated sports and entertainment banker who taps into Westpac’s private bank and wealth management business, BT Financial Group.

Clients receive tailored advice on a range of financial issues, including banking, financial planning and wealth management – during and post-career – insurance, income protection against injury and foreign exchange for overseas events and earnings.

Hackett, who used his connections, profile and word of mouth to woo new clients for the bank, says Alpha seeks to help athletes avoid getting caught up with people offering bad financial advice.

Tennis prodigy Mark Philippoussis and boxer Mike Tyson are just two of many high-profile athletes and entertainers who have earned millions and then lost their fortunes through poor investment decisions and receiving bad advice.

“There are so many athletes who fall into financial hardship,” Hackett says.

“When you’re 23 or 24, earning a million bucks a year and someone says you can return 50 per cent on this investment in one year, such as [on] a Vanuatu property development, you sit there and think, ‘Wow’.”

“Unfortunately, sporting personalities are a bit like a light that attracts some of these moths,” Kelly says.

“There’s been plenty of times where people come to players and say this is a guaranteed 20, 30 or 40 per cent return . . . and if it sounds that good it usually isn’t that good, so you’ve got to be very careful.”

Hackett knows first-hand about the vulnerability of professional athletes to being seduced by so-called trusted advisers on “get rich quick” schemes.

“I was in a precarious situation [aged about 23, when I] sat in front of Storm Financial myself – and luckily enough I realised it wasn’t a great deal so it wasn’t something I invested in,” Hackett says.

Australian cricket star Andrew Symonds, former national cricket coach John Buchanan and a host of other sports identities weren’t so lucky. They were just some of the 13,000 clients who lost $3 billion in the collapse of financial advisory firm Storm Financial in 2009.

Hackett’s father Nev, a police officer of 41 years, had always championed financial literacy to Grant. So from his share-trading days as a teenage swim sensation, Hackett planned to work in finance.

While juggling his gruelling training schedule and competitions at home and overseas that took him to world records, Hackett studied finance part-time at Gold Coast’s Bond University.

About two years after winning his first Olympic gold medal at the 2000 Sydney Olympics, Hackett, who was a Westpac ambassador, lunched with a senior executive at the bank and discussed career plans.

Rob Coombe, who was in charge of BT Financial Group, acquired by Westpac in 2002, and who is now head of the retail and business bank, was also interested in sport. He briefly played professional rugby league before his banking days.

“It was in the course of that lunch that the seed was sown for what has actually become Alpha today,” Coombe says.

“I said to Grant, ‘Australia’s got a phenomenal number of successful sports people who make a lot of money, but there are many people who have made a lot of money, blown it and don’t look after it well’.”

Hackett, who won three Olympic gold medals (including one for a relay) and whom many sports commentators regard as the greatest-ever distance swimmer, says certain characteristics of the profession can produce large financial risks.

Athletes and entertainers derive fluctuating income from contracts, prize money, sponsorships and, in the case of musicians, royalties. “It’s a lot of money while you’re young; it’s not an orthodox career and it has a very short lifespan,” Hackett says.

“Young people don’t necessarily have the sophistication to handle that sort of money, and going from making zero to seven figures,” he says.

“We try and set them up with an alternative form of revenue so they retire into something and have a solution that stops them eating into their capital base.”

Coombe, who gave Hackett a mandate to start up the Alpha business, sees it as a growth opportunity for Westpac. Since launching on October 27 last year, Westpac’s client base of athletes, sports executives, managers, media personalities and entertainers, such as musicians, has grown by 40 per cent to about 1000 people.

Hackett has brought on former Wallabies rugby player Tim Horan and retired AFL Collingwood player Paul Licuria, as Alpha directors.

“I think it’s a growth segment because there’s a lot of income and it’s really under-serviced,” Coombe says.

Kelly, who represents some of the country’s leading athletes, says competition to handle elite athletes’ money is fierce among a select group of businesses and Westpac is not the only serious player in the market.

It’s little wonder. AFL players earned a total of about $130 million in player payments last year, excluding lucrative sponsorship earnings. Cricketers are now earning millions of dollars in the Indian Premier League, while soccer stars, rugby and rugby league players are paid handsomely for on and off the field talents.

Investment adviser Evans & Partners, private banks, and boutique firms such as Strategic Financial Management provide select financial services to athletes as part of their service to general clients.

Evans & Partners, led by executive chairman David Evans, who is also chairman of AFL club Essendon and former head of Goldman Sachs JBWere’s private wealth business, handles fixed income, equity and property investments for high-earning athletes.

Evans refers clients to Westpac for debt-side investments and says they do a “very good job”.

As for any suggestion that Hackett is just a marketing face for the bank, Coombe is quick to dismiss this.

“I’ve seen that happen so many times before in banking,” he says.

“A competitor will say they’re now serious about something because they’ve put a name person in front of that segment. That just doesn’t work. People see through that pretty quickly.”

Hackett, married with 22-month-old twins, certainly has a lot on his plate, and is studying for a master’s degree in global business to help earn his stripes at Westpac.

On top of his full-time job and study, he appears on Channel Nine Melbourne’s Wide World of Sports each Sunday morning and occasionally presents segments on the network’s weekly travel show. When the Olympics roll around, he’s contracted to work for Nine too.

While he used to wake before dawn to follow the black line up and down the pool, he now regularly rises at 4.15am to fly from his home town of Melbourne to work two to three days a week in Westpac’s Sydney office.

“He’s on the job by seven. I have conversations with him on Sunday and [in the] early hours of the morning. He’s full-on,” Coombe says.

“He brings that focus that made him so successful in sport into business. He’s someone that sets targets and accomplishes what he set out to do.”

Hackett, who stands an imposing 198cm (6 feet 6 inches), with shoulders that made him almost unbeatable in the water over 1500 metres, says he enjoys leadership.

“I’ve been learning how to transfer some of that from sport into business,” he says. “I love working with people, driving people and seeing them get the best out of themselves.

“That inspires me just as much as achieving a result in the 1500-metre freestyle.”

That mentality will certainly impress Westpac chief executive Gail Kelly, whose own father was a professional soccer player.

“When I look at my leaders, I look for people who actively work to help others grow, develop and see other people succeed,” Kelly recently told the Financial Review.

While his eyes are firmly on a career in finance for the foreseeable future, Hackett would “perhaps” consider following other sports stars, including former AFL ruckman Justin Madden and aerial Olympic skier Kirstie Marshall, into politics.

“It’s something that definitely interests me,” Hackett says.

“I think everybody should be interested in politics. Fundamentally, I think it should be ingrained in the Australian psyche.

“It’s quite funny, you go from being an athlete, where a majority of Australians love you, to a banker where that is cut off a bit. If I went to a politician it’s a world of diminishing returns,” he says, laughing.

Bank bashing has become something of a sport in Canberra and Hackett seems as well placed as anyone to be in the middle of it.

As for the prospects of a sporting comeback, as Ian Thorpe is aiming for at the 2012 Olympics, Hackett says there is “no chance” of him doing the same.

He rarely swims these days and tries to squeeze in a gym session when time permits.

“If you look at the Michael Schumachers and Lance Armstrongs of the world, who earned tens or hundreds of millions of dollars out of sport, they still went back to it because they probably didn’t find something they were as passionate about,” Hackett says.

“I made sure I went into something [else], got immersed in it and got busy.”